GST to be death knell for Surat's Rs 50,000-cr textile industry

Cheap imports put powerlooms at a bigger disadvantage

Dhiraj Shah, managing director of Shalon Industries, is worried he will have to pay a higher goods and services tax (GST) rate on synthetic yarn while the fabric he makes will attract a lower rate. With an annual turnover of Rs 500 crore, Shah’s unit makes synthetic fabric in Surat, Gujarat, and has a 1 per cent share of the city’s Rs 50,000-crore textiles business.

Shah has two problems. He will collect 5 per cent GST from his buyer and pay 18 per cent duty on raw yarn. Also, his finished goods will face competition from cheap, imported fabric, which